DIBD arranged a business delegation to the townships of Johannesburg to study the dynamics in a typical urban BOP market and thereby identify possible business opportunities for Danish companies. The purpose was to give a selected few Danish companies the opportunity to get a ‘hands-on’ feeling with the Base of the Pyramid, and to jointly identify challenges and opportunities for doing business.
The study trip included visits to housing projects, medical facilities, and numerous shops and markets in Alexandra, the largest township in Johannesburg. In addition, supply chains of certain products were examined to assess the value addition that products undergo from factory to the end-user at the BOP.
Many findings came out of the trip. Especially, it became apparent that building low-cost houses to cater for the immediate needs of the poor is much more than just setting up four walls and a ceiling.
One participant expressed it this way: “It is important to realize that there is a difference between a 'home' and a 'house'. A house is four walls and a ceiling covering an immediate need, whereas a home is a place you own and in which you live. Most people support quality of life and well-being rather than survival. I'm afraid this was not part of the public housing projects in South Africa, which were characterized by poor architectural and technical quality, and therefore the houses will look and feel slummy, dusty, and unpaved after eight years. It doesn't have to be that way.”
Other areas, such as improving the design of medical facilities, and supplying quality consumer goods through small scale distribution networks, were discussed as possible new areas for Danish companies to do business at the BOP in South Africa.
Five Danish and two South African companies participated in the study trip. In addition, representatives from FABCOS (a Johannesburg based business association), Gordon Institute for Business Science (GIBS), Afrikaanse Handelsinsitut (AHI), the Embassy of Denmark in Pretoria, and IFU took part in the trip.
The BOP study trip was the first of its kind in DI’s history.
The full publication from the study trip can be found here